Managing money stress
Financial pressure is on the rise thanks to the cost of living crisis. Luckily there are actionable steps to help you manage your money woes
As grocery and electricity bills rise and rents and mortgage repayments skyrocket, most of us are feeling some kind of financial pressure right now. The difference between financial pressure and financial stress, though, is the impact the changing cost of living is having on your mental health.
According to Kristin NaragonGainey, an Associate Professor of Psychological Science at the University of Western Australia, financial stress is generally either objective or subjective.
“There are a number of different terms people might use, but the most important thing is to separate it into two parts: one is an objective situation where you don’t have enough funds or assets or income to cover your necessary expenses and debts, and the second is subjective, so how you are feeling about your financial situation,” Naragon-Gainey says.
“The harder the financial situation you’re in the more likely you are to have worry, but the two are separable and there are people in pretty difficult financial situations who aren’t so worried and people who are meeting their expenses but are quite distressed.”
WHY ARE SO MANY PEOPLE EXPERIENCING FINANCIAL ANXIETY RIGHT NOW?
In a nutshell, things feel very economically uncertain right now and uncertainty tends to be a fertile breeding ground for anxiety or anxious feelings.
Over the past year, inflation has caused cost-of-living basics such as food, transport and utilities to soar, while wages have by and large remained stagnant and failed to keep up with how much things cost.
There is also a shortage of rental properties available, meaning prices are skyrocketing for those who don’t own their own homes, and those that do are facing major increases in their mortgage repayments after yet another interest rate rise by the Reserve Bank of Australia.
All of this comes after almost three years of living in a cocooned Covid-19 limbo which restricted our freedom to travel, spend time with family and had its own set of uncertainties.
When you combine all of those things, it’s actually pretty understandable and, dare I say it, reasonable, that so many of us are feeling anxious about where we’re living, how we’re living and what the future is going to look like.
That doesn’t mean you have to fall into an hours-long emotional doom scroll, though.
In fact, far from it.
“In general, humans are wired to want predictability and certainty about the future and it’s quite hard when that shifts and there is a lot of uncertainty introduced.
“I think it’s natural to be uncomfortable with that and want a little more guarantee that things are going to be okay going forward,” Naragon-Gainey says.
HOW CAN YOU MANAGE FINANCIAL ANXIETY?
Just like falling down a rabbit hole of vaguely related content on TikTok at 11pm, imagining the worst-case scenarios can be an easy anxiety trap to fall into, and one that can feel hard to get out of.
The good news is that taking small steps can shrink the size of your anxiety quickly.
Naragon-Gainey says, to start with, take a few small but simple steps.
“Creating a more thorough budget, checking in with financial consultants, and looking into switching utilities are all little things that can make a difference over time and the act of doing something can in itself be helpful for your wellbeing.
“A few other things include recognising that it is a difficult situation and trying to be not to be too hard on ourselves, and keeping in mind that who we are as a person, even though it can feel like it sometimes, really isn’t defined by our financial state.”
During this time, Naragon-Gainey says you should also be looking for things that you do really well, explaining that focusing on the negative can make the situation worse, whereas recognising positive behaviours is just as important as finding areas for improvement.
HOW CAN FINANCIAL ANXIETY IMPACT YOUR HEALTH?
Like any stress, if left unmanaged or unaddressed, financial anxiety can have serious side effects on your mental and physical health. This can include short-term impacts such as disrupting your sleep, feeling drained or on edge, and longer-term issues like depression.
It’s because of these risks that Naragon-Gainey says taking a number of steps to manage your anxiety is important and beneficial.
“Having a variety of ways of coping means that at any given time, you’re more likely to have something that might help rather than just one thing that may work in some situations but not others,” she says.